Finding Text
Finding Number 2022-002 ? Federal Grantor ? U.S. Department of Agriculture ? Pass-Through Grantor ? State of Connecticut Department of Education ? Federal Program Name ? Child and Adult Food Care Program ? CFDA Number ? 10.558 ? Finding Type ? Material Weakness in Internal Control over Major Programs ? Compliance Requirement ? Activities Allowed or Unallowed and Allowable Costs/Cost Principles ? Criteria ? Title 2 of the Code of Federal Regulations (CFR) Part 200 establishes cost principles for determining costs applicable to federal awards. These principles include the requirement that cost allocation methodologies be reasonable and documented and that all expenses charged to federal awards are appropriately supported. ? Condition ? The organization does not have a documented cost allocation plan and there is a lack of a documented approval process for expenses. ? Cause ? Not enough emphasis is placed on the importance of controls and documentation. ? Effect ? Costs that were allocated to the federal award were made based on unsupported allocation methodologies that were also not consistently applied. In addition, there was insufficient support for costs charged to federal award programs. As a result, costs may have been incorrectly charged to the federal award. ? Questioned Costs ? Unknown ? Repeat Finding ? No ? Recommendation ? Management needs to develop a written cost allocation plan and allocations being used must be demonstrated to be reasonable. There should also be a formal review and documented approval process for expenses charged to federal awards, including those that are allocated. ? Views of Responsible Officials ? Management agrees with the finding. A cost allocation plan will be developed and documented. The approval of invoices will be documented.